Zakynthos, Greece — It was known to the Venetians during the heyday of their trading empire as "The Flower of the Levant," but the Greek island of Zakynthos has now earned the mocking soubriquet "the island of the blind."

In the latest scandal to hit crisis-weary Greeks, the local government suspects that at least 600 people on the picturesque Ionian island managed to have themselves falsely registered as being blind, entitling them to generous monthly checks from the authorities in Athens.

That represents 2 percent of the island’s population of 35,000 – nearly 10 times the average rate of blindness in the rest of Europe, according to the World Health Organization. In reality there is nothing wrong with their sight at all. "Blind" taxi drivers cheerfully ferry tourists around the holiday destination, recreational hunters with purported sight problems regularly take to the hills in pursuit of wild birds and rabbits, and "visually impaired" shopkeepers, taverna owners, and farmers with vineyards and olive groves go about their daily business.

“I’ve seen them playing cards in the bars and driving their cars – it’s ridiculous!” says a local businessman, Spiros Skiadopoulos, who runs a photography college in Athens but maintains a home on the island.

The scandal of the fake blind people on Zakynthos is a sharp reminder of the immense challenges that will be faced by whoever takes the reins in national elections on May 6, vividly illustrating the kind of corruption that has helped push Greece to the brink of economic and social meltdown.

Fraudulent social welfare claims cost Greece 111 million euros ($146 million) last year, according to government statistics. And just last week, Labor ministry officials said they had halted welfare or pension payments to 200,000 people – around 2 percent of Greece’s population – because they were discovered to be based on fraudulent claims.

A mayoral crusade

For their purported disability, the "blind" islanders received monthly payments of at least 350 euros ($462), sometimes much more depending on their age and family status. Those who supposedly needed caregivers received more money.

But with the newly elected mayor of the town of Zakynthos declaring an end to the payments – part of a tough crackdown on such abuses on the island – the defrauders' have been brought up short.

Mayor Stelios Bozikis notified the authorities in Athens of the scam and an investigation has now been launched. All the ‘blind’ people on the island will have to submit to independent tests by ophthalmologists in the capital.

“I realized when I became mayor that a lot of illegal things were taking place here,” says Mr. Bozikis, a lawyer who was elected in January 2011. “We’ve estimated that these false claims cost Zakynthos at least 2 million euros a year.”

His crusade against benefit fraud and other scams on the island has earned him the anger of many of its inhabitants. The belief among Greeks that if something is up for grabs from the state, you should grab it, is well-entrenched. About 50 irate island residents stormed a council meeting in March and hurled eggs and yogurt at the mayor. He says he regards the attack as “a badge of honor” because it shows his campaign is hitting home.

The mayor has accused two men of being behind the fraud – the former governor of the island of Zakynthos, who was in power from 1998 until 2010, and the chief ophthalmologist at the local hospital. They are accused of falsely registering islanders as blind in return for bribes and votes in elections. Both deny the charges, which are the subject of an ongoing investigation by the Greek health ministry.

The tradition of 'little envelopes'

Abuses include farmers drawing billions of euros from the European Union in fraudulent subsidy claims, people claiming pensions for relatives who have long since died, and women who have never had children receiving multiple maternity benefit payments.

The wheels of corruption are oiled by the long-standing practice of Greeks offering fakelaki – which translates literally as "little envelope" but in reality means a bribe – to public officials for everything from construction permits to medical operations. Deeply entrenched in the Greek psyche, it is a system of favors that dates back to the country’s centuries of Ottoman rule.

“The long‐standing acceptance of corruption, and fatalism about the chances of preventing or resisting it, drives petty wrongdoing,” the Berlin-based anti-corruption watchdog Transparency International said in its most recent report on Greece.

“When people believe that their leaders and officials exploit their authority with impunity, they are more likely to act along similar lines in their own lives.”

In its 2011 corruption perceptions index, Transparency International ranked Greece 80th out of 183 countries, putting it beneath countries like Cuba, Tunisia, China, and Saudi Arabia. In the European Union, only Bulgaria ranked lower.

One taxi driver who pretended to be blind and was drawing a monthly disablity allowance "bragged" about his ability to cheat the welfare system, a colleague says.

"He was bragging about it around the island," the other taxi driver, who asked not to be identified, says. "It wasn't right but if someone offers you that money, you'd be silly not to take it."

'That guy is supposed to be blind!'

No one has been more angered by the whole saga than the island’s 40 or so genuinely blind people.

“What makes me really, really mad is that I am blind and these people are laughing in my face by taking disability allowances,” says John Venardos, who began to go blind a decade ago as a result of a genetic trait that runs in his family.

Mr. Venardos, who was raised in Canada and now does his best to run a family-owned hotel fronting one of Zakynthos’s beaches, says corruption was endemic in Greece.

“Everything is abused here. People think ‘why should my next door get false benefit payments and not me?’"

He said the scam had brought shame and embarrassment on Zakynthos, which lies south of Corfu and attracts hordes of package tourists during the summer.

“They are calling us ‘the island of the blind.’ When I go to Athens I’m afraid to say I’m from Zakynthos and walk down the street with a white stick because people will think I’m faking it.”

His 75-year-old father, Nikolaos Venardos, who is also suffering from the genetic disorder, says the scam started to come to light about a year ago.

“An islander went to the welfare office to pick up his blindness checks. A female staff member who was on a break saw him then take off his dark glasses, jump into a Porsche and drive away. She called the police and said ‘That guy is supposed to be blind!’ That’s how it all started.”

Change requires more than new laws

The scandal has only fueled Greeks’ cynicism towards a political and social system that has brought the country close to ruin.

“I feel very bitter towards our politicians,” says Nikolaos Plessas, sipping thick black coffee in his cafe in a village of pastel-coloured cottages on Zakynthos.

“They have a [darn] cheek to even run for election after what they’ve done. Hard-working people like me fund their extravagant lifestyles. I won’t be voting next month.”

The campaign being waged by the mayor on Zakynthos is a microcosm of the much bigger effort required by Greece’s politicians to curb fraud, corruption, tax evasion and other long-standing abuses in order to put the country’s economic house in order.

Many Greeks say that will require more than legislation – it requires an entire change of culture.

“The whole system is sick,” says Mr. Skiadopoulos, the businessman. “Everybody is corrupt in Greece – the lawyers, the doctors, the judicial system, police, customs – everybody. All of us are guilty, all of us are responsible for what has happened.

“We need to change our whole mentality. Our European partners need to come here and be aggressive in pushing us to change. If they still think we are the devil of Europe, then they must throw us out.”